What are a company's quarterly earnings?
Updated on August 24, 2026 · by Alex
They are the report that publicly traded companies release every three months with their sales, their profits and their financial position. It is the moment when the market checks what it believed about a company against what actually happened.
Four things matter more than the rest:
It is the only moment in the year when the company has to show audited numbers instead of telling a story. Between reports, the price moves on expectations; on report day, those expectations collide with reality.
That is why earnings days tend to bring big moves in a matter of hours, in either direction.
Looking only at the quarter that just ended and ignoring the guidance. Very often the stock falls on excellent results, and the explanation is in the guidance: the company reported a record quarter and, on the same call, warned that it expects to sell less next quarter. The market discounts the future, it doesn't reward the past.
The second mistake is trading on report day itself. The big move usually happens outside regular hours, in premarket or after-hours, where there is very little volume and prices jump around. Whoever buys in that window often does it at a price that never shows up again once the market really opens.
